Digital and crypto-assets: Tracking global adoption rates and impacts on securities services

Abstract

As we move into an age of digital transformation, digital assets in their various forms are at the forefront of many conversations. This paper explores the various forms of digital assets available today, and the impact these assets are having on securities services providers. The terms ‘digital assets’ and ‘crypto-assets’ cover a broad range of different definitions — we explore the definitions available today and how these vary depending on the defining authority. Tokenisation and the technology that enables tokenisation offers an opportunity for releasing trapped liquidity and the opening up of markets for untradeable asset classes. This process and the subsequent digital assets present an additional set of challenges for securities services providers and their clients. To address these challenges, the industry needs to come to agreement on a standardisation of processes, roles, regulations and definitions for digital assets to succeed as an asset class. Through the tokenisation proof of concept (POC) Standard Chartered recently completed, we explore the potential blockchain technology affords and some of the potential use cases of this technology, as well as the role a securities services provider can play. The impact of digital assets on securities service providers is inevitable. The skills and knowledge that exist today will remain relevant, but the roles and the way this knowledge is applied will change. In order to keep pace with this evolution, securities services providers must ensure they stay abreast of changes in technology and the opportunities this affords in order to adapt to these new opportunities and roles.